When Meaghan Pearce stopped buying Christmas gifts, about five years ago, it was a financial decision – she wanted to save money, so started making gifts instead. Now the 29-year-old interior designer is in better financial shape, but she still makes her own gifts. She believes handmade items are more meaningful and take the focus of the holidays away from consumerism.
“It makes you feel good to give something you have put effort into, instead of buying something you can get anywhere,” said Ms. Pearce, who lives in Milton, Ont., about 30 kilometres west of Toronto. “I feel like [for some], the focus of Christmas is not about being with people any more. … It’s about how much money you put toward your presents.”
Last year, her family adopted a Secret Santa gift exchange – where each person draws one name instead of buying gifts for everyone – and capped spending at $75. Ms. Pearce made a wooden mosaic that could be hung as wall art or used as a tray. Other recent gifts have included personal musical recordings and a jewellery holder made from a used window frame. “I prefer to focus on the time I put into making that gift than spending a lot.”
Ms. Pearce is among a growing group of Canadians trying to move toward a more minimalist holiday – which for many means cutting down on Christmas shopping.
Recent surveys by Equifax Canada and Chartered Professional Accountants of Canada found a majority were planning to spend less this year. The CPA Canada survey, which polled 2,010 people, pegged average holiday spending at $583, down from $643 the previous year. According to the Equifax survey, which polled 1,566 people, 54 per cent of Canadians under 55 said they would be reining in spending because they already carry too much debt. Of people in that same age group, 46 per cent said their debt gives them “a lot” of anxiety.
Credit Karma also released a holiday survey that looked into anxiety and debt. It found 51 per cent of 1,009 respondents said they would stop buying gifts if they felt they could, and 39 per cent somewhat or strongly agreed to “feeling intense personal stress leading up to and through the holidays.” The survey, released in November, found 47 per cent of respondents use credit cards for Christmas purchases.
Rob Kilner, a licensed insolvency trustee in Barrie, Ont., says he estimates people spend at least $1,000 for the holidays, including presents, food, wine and gas. Many people end up unable to pay it back over a full year, so enter the new holiday season with debt from the previous round of gift-giving. He says holiday spending is often the last straw leading to insolvency, bringing a round of fresh clients into his office early in the new year. “We call it the January Boom.”
He urges people who put holiday spending on credit to immediately make a plan to pay it off, which means deciding what expenses will be cut to service the debt. “If you’re just paying your minimum, you can be paying it back for 20 years,” he says. “If your interest rate is 20 to 30 per cent, over six months, $1,000 might really be $1,200. You have to ask yourself, ‘Am I willing to spend that much for the holidays?’"
He likes the Secret Santa option, where only one gift purchase is required, and recommends that people planning to exchange gifts agree on a price limit in advance. “A lot of people end up just trying to match everybody else, but when there’s not a conversation, you overestimate what people spend.”
Saskatoon financial planner Janea Dieno has advised some clients against buying gifts – but says people rarely take her up on that advice. She recommends dividing a family budget into housing, transportation, financial obligations and lifestyle, which includes groceries, going out and sports. Since the first three categories are fixed costs, Christmas spending has to come out of the lifestyle budget, which may mean forgoing other expenses. “If you are an extravagant [gift-giver], a little bit each week needs to be set aside leading up to Christmas. The people who are more financially successful make a list early and then buy in small increments.”
She recommends withdrawing cash for Christmas shopping and stopping when it runs out.
Ms. Dieno adds she’s seen an increase in middle-class families who are outspending their means, both at Christmas and throughout the year. “Even five years ago, it was a lot of low-income people coming for [cash-flow planning advice]. It’s not any more. … A lot of the high debt-loads are households making between $80,000 and $150,000 a year; people who want to keep up with the Joneses.
“More parents feel like they need to give their children everything they ask for.”
Ashley Devenny, a social worker in Hamilton, stopped buying Christmas gifts years ago, and says it completely changed her feelings about the holidays.
“My parents and my brother and I were just buying each other things for the sake of buying each other things. I felt it was kind of silly. I don’t need another pair of pajamas,” Ms. Devenny said. “It didn’t make my experience of the holidays any better.”
Now, she focuses on spending time with the people she cares about, and cooking for them.
“Taking [presents] away has allowed me to be more excited to enjoy my time with my friends and family.”
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